The leading shareholders of INWIT, Italy’s largest mobile telecommunications tower operator, are arranging financing for a potential buyout of minority investors, as a contractual dispute with its two biggest customers adds pressure to the company’s business outlook and market valuation.

French private equity firm Ardian and Oak Holdings 1, an investment vehicle backed by Global Infrastructure Partners (GIP), Vodafone and KKR, are exploring a bid to take INWIT private, two people familiar with the matter told Reuters. The investors are discussing financing arrangements with banks, but deliberations are ongoing, and no final agreement has been reached.

Ardian controls 32% of INWIT, while Oak Holdings owns 39%, giving the two shareholder groups a combined 71% stake. Under the potential transaction, the investors would seek to acquire the shares held by minority shareholders and remove the company from the Milan stock exchange.

Register for Tekedia AI in Business Masterclass.

Join Tekedia Capital Syndicate and co-invest in great global startups.

One of the people said Abu Dhabi investment firm Mubadala was expected to take a stake in INWIT as part of the plan. The precise structure of the proposed transaction, its financing requirements and the terms that might be offered to minority shareholders have not been disclosed.

Ardian, GIP, Vodafone, KKR and Mubadala declined to comment. GIP is part of US investment firm BlackRock. An INWIT spokesperson said the company had no information about the potential transaction.

The discussions come at a difficult moment for the tower operator, which has become embroiled in a contractual dispute with Telecom Italia and Swisscom’s Fastweb, its two main customers. Both telecoms groups have initiated procedures to terminate their respective contracts with INWIT as they seek to renegotiate the agreements on more favorable terms.

The combination of takeover discussions and customer uncertainty places INWIT at the intersection of two competing considerations for investors: the long-term value of telecommunications infrastructure and the commercial risks associated with the contracts underpinning its business.

Contract Dispute Adds Pressure to INWIT’s Valuation

INWIT owns and operates telecommunications towers and related infrastructure used by mobile network operators to provide wireless services. Its business depends on making that infrastructure available to telecoms customers, creating a commercial relationship in which the terms and duration of customer agreements are important to revenue visibility.

The dispute with Telecom Italia, also known as TIM, and Fastweb has introduced uncertainty into that relationship. Both companies have begun procedures to terminate their contracts with INWIT as part of efforts to renegotiate terms they consider more favorable.

The proceedings do not necessarily mean that the agreements will ultimately end. Their immediate significance is that the parties are seeking changes to the commercial arrangements, creating uncertainty over the outcome of negotiations and the future terms under which the tower infrastructure will be used.

For a tower operator, the risk extends beyond the loss of a single customer relationship. Contractual terms influence the predictability of future revenue and the ability to assess the value of infrastructure assets over time. If major customers secure lower prices or other concessions, the effect could weigh on expected cash flows. If negotiations fail and contracts are terminated, the implications would depend on the extent to which the affected infrastructure could be used by other operators.

The available information does not establish that INWIT will lose either customer, nor does it quantify the financial impact of the dispute. Nevertheless, the negotiations have become a material consideration as the company’s shareholders explore a possible take-private transaction.

INWIT’s market value has fallen about 27% over the past year to approximately $7.1 billion, or €6.3 billion, as of Friday’s close, according to LSEG data.

That decline provides context for the potential buyout discussions, although it does not establish that the contractual dispute alone caused the fall in the company’s valuation. A takeover proposal would need to account for both the value of INWIT’s existing infrastructure and the uncertainty surrounding its relationships with its principal customers.

For the controlling shareholders, taking the company private could provide greater flexibility to manage negotiations, restructure the business or pursue longer-term investment decisions away from the scrutiny of public markets. Those are potential advantages of a private ownership structure, rather than confirmed objectives of the investors involved.

The outcome would also depend on the financing terms and the price offered to minority shareholders. With Ardian and Oak Holdings already controlling a majority of the company, the main transaction concern is how the investors would structure and fund the acquisition of the remaining shares.

Infrastructure Investors Revisit INWIT Takeover Prospects

The latest financing discussions revive speculation about INWIT’s ownership that has persisted since February, when a French media report said Ardian and infrastructure investment group Brookfield were interested in taking the company private.

The current discussions involve Ardian and Oak Holdings 1, whose investors include GIP, Vodafone and KKR. The potential involvement of Mubadala would add another major institutional investor to the proposed ownership structure, although the size of any prospective stake and the terms of its participation remain unclear.

The interest reflects the position of telecommunications towers as long-lived infrastructure assets supporting mobile connectivity. Tower operators provide the physical sites and related facilities that network operators use to deploy and maintain wireless services, allowing telecoms companies to expand coverage without necessarily owning every part of the underlying infrastructure themselves.

For infrastructure investors, these assets can offer exposure to long-term demand for mobile connectivity. Their attractiveness, however, depends on the stability of customer agreements, the economics of tower access and the capacity to sustain returns on capital invested in the network.

INWIT’s current dispute illustrates why those commercial relationships matter. Infrastructure assets may remain physically valuable even when negotiations with customers become difficult, but their financial value depends partly on the revenue that can be generated from them and the terms under which customers use them.

Analysts say a take-private transaction could allow the shareholders to reassess those issues outside the public market, but it would not remove the underlying contractual uncertainty. Against that backdrop, any prospective buyer would still need to evaluate the risks surrounding TIM and Fastweb, as well as the potential costs and benefits of revised agreements.

The financing discussions also indicate that the transaction remains at an exploratory stage. The investors are speaking with banks, but the people familiar with the matter cautioned that deliberations are continuing. There has been no disclosed final bid, agreed purchase price or confirmed completion timetable.

INWIT, which listed in Milan in 2015, has not confirmed the takeover discussions. Its spokesperson said the company had no information about the matter, leaving the reported plans dependent on negotiations among the shareholders and prospective financing partners.

Minority Shareholders Await Clarity on Potential Offer

A take-private deal would place the interests of minority shareholders at the center of the next stage of the process. The controlling investors would need to determine the terms on which they would seek to acquire the remaining shares, while the company’s market valuation and contractual outlook would influence negotiations over price.

The 27% decline in INWIT’s market value over the past year could shape those discussions, but it does not by itself indicate what the controlling shareholders would be willing to pay. Any offer would need to be assessed against the company’s earnings prospects, infrastructure assets, contractual risks and the premium, if any, offered to investors.

The potential participation of Mubadala also remains unconfirmed beyond the account provided by one person familiar with the discussions. Its involvement could affect the financing and ownership structure, but the available information does not specify whether it would invest directly in the acquisition vehicle or through another arrangement.

For now, the reported discussions show that INWIT’s principal shareholders are examining a route to consolidate ownership while the tower operator faces negotiations with its two largest customers.